Economists hail rise of foreign investments despite anti-terror war

Economists hail rise of foreign investments despite anti-terror war

Cairo: The recent increase of Egypt's foreign direct investments (FDI) amid the country's ongoing war against terrorism is a positive indicator that the Egyptian economic reform program is on the right track, said Egyptian economic experts.

The Egyptian ministry of investment said on Friday that FDI in Egypt rose by 26 percent to reach 8.7 billion U.S. dollars in the 2016/2017 fiscal year that ended in late June, compared to 6.9 billion dollars in the preceding fiscal year.

Economists still hope for further FDI to boost the country's economy that has been suffering over the past six years that witnessed massive political turmoil and relevant security issues, which led to declining tourism and foreign investment amid growing budget deficit, inflation rate and foreign and domestic debts.

"It is a very positive indicator. We hope this reflects on the gross domestic product, reduces unemployment and limits the budget deficit," Basant Fahmy, member of the parliament's economic committee, told Xinhua.

While Egypt is implementing a strict three-year economic reform program that includes austerity measures, energy subsidy cuts, tax increase and a floating exchange rate, the country is engaged in a war against terrorism that killed hundreds of policemen and soldiers since the military removed former Islamist president Mohamed Morsi in July 2013.

Most of the anti-government terrorist attacks as well as those against the country's Coptic minority have been claimed by a Sinai-based group loyal to the regional Islamic State (IS) militant group.

Security campaigns also killed hundreds of militants and arrested a similar number of suspects as part of the country's anti-terror war declared by President Abdel-Fattah al-Sisi, who was then the army chief, following Morsi's ouster in response to mass protests.

Fahmy said that Egypt still needs further and faster foreign investments, arguing that they are below the desired level due to the general regional instability as well as the ongoing security conditions and counterterrorism war in Egypt.

"Investors care most about security and social stability," she explained.

"The FDI increase shows that Egypt is on the right track due to the laws for economic reform and fighting corruption in addition to the new investment law that lures investors," the lawmaker said, adding that the recent financial and monetary reforms would improve the investment climate in Egypt.